Receiving an inheritance can be a good thing; however, for some heirs, a sudden windfall can also be their downfall, especially if they are unprepared to handle a large sum of money. If when planning your estate, you intend to leave money to your children, it is important to consider their ability to handle that money and to make provisions in your will that are in their best interest. You cannot, however, just stop at making the bequest and setting for the provisions. You should talk to our heirs and explain their inheritance and your intentions as well.
Be open and honest. There is no reason to disinherit an heir just because you think they cannot handle the money on their own. Tell them what they are getting, the provisions you have made, and inform them of your expectations as well. If you feel that an heir cannot successfully handle the money you wish to leave them, consider a trust. A trustee can manage the funds, giving the heir an allowance on a scheduled basis. This way, the money is protected, as is your heir’s financial future.
Some people simply do not have any money sense. While you cannot always prevent this, even with the best of education strategies, you can at least attempt to help your heirs to understand money and how to manage it intelligently by talking to them and teaching them everything from basic budgeting to investing. Those with money to will typically have this kind of money sense. If not, help your loved ones by setting them up with some classes in finance or advice from a professional financial planner or advisor.
Stephen Unsworth
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